Seize the E-commerce Opportunity: Overcome International Trade Challenges
Retail growth is slowing in the UK, so is GDP. Physical stores are closing faster than they are opening, according to PwC and Local Data Company (LDC) data, with inflation, stagnant wages and mounting consumer debt finally having an impact on the British retail landscape.
In 2016, LDC and PwC data found that 896 stores closed, at a rate of 15 per day, whilst store openings maintained a rate of 12 per day. According to the Office of National Statistics (ONS), sales figures for December 2016 “declined 1.9%—the biggest sales drop since April 2012.”
September’s figures, for the three months to the end of September, were also down, despite a slight summer surge. Retailers and e-commerce stores are hoping for an improvement this holiday season, with Christmas, Black Friday and Cyber Monday promotions, sales, stock and point of sale out in stores and online earlier than in 2016.
The Guardian notes that, “Year-on-year sales volumes were up just 1.5% in the past three months, compared with about 4% annual growth between 2014 and 2016.” This has not been a great year for retailers, with figures for the first half of the year lower than revenue targets. Everyone in the sector, including financial analysts watching it closely, are keen to see the sale season beat expectations.
New Growth Avenues: Cross-border?
Cross-border trade, on the other hand, is not affected by UK growth slowing down. Many analysts expect a significant amount of cross-border trade to come from high-growth markets, such as Latin America, South East Asia, India, China, the Gulf States, and parts of Africa.
Current estimates for cross-border growth suggest it will increase from “$401 billion in 2016 to $994 billion in 2020.”
In 2015, PayPal research showed that 86 million online shoppers from abroad purchased retail goods from British E-commerce retailers. Chinese, American and Indian consumers were amongst the most active buyers, keen to buy from UK-based online stores. International e-commerce trade continues to grow, with more UK retailers configuring websites for local customers and audiences from new markets.
How to benefit from international trade?
#1: Seek advice
E-commerce retailers should have a clear idea where customers are coming from. Website analytics should show countries of origin, which means you need to ensure your checkout is configured to handle a wide enough range of international payments to accommodate these customers.
You also need to set up shipping options to ensure they will receive their goods in a timely fashion, with postage pricing set to accommodate the cost of shipping and anything else, such as import duties. Once the basics are covered, and you want to generate more revenue from an international market, it’s always worth seeking professional advice.
The Department for Trade and Industry (DTI), formerly UKTI, have a range of services, from Passport to Export, to a specially created e-exporting scheme and sometimes funded, in-country visits, official trade missions and Embassy receptions (useful for product launches). It is worth checking out the Exporting is GREAT website, and if DTI can’t help, there are numerous specialist consultants and agencies that can provide advice and support for expansion into hundreds of overseas markets.
#2: Configure your website(s) for local customers
Pricing, currencies, languages and customer/sales support for local customers are all important when expanding overseas. Retail brands need to take the same approach in one country they would in another, making things as easy as possible for customers to purchase without confusion over languages or currencies.
When a market proves viable enough, it may also be worth recruiting local staff or freelancers to provide customer support/after sales care via a Live Chat feature or Facebook Messenger (new channels may be required, depending on what’s popular in that market). This way, messages or calls are answered within business hours for that country/region, which will increase sales and reduce workloads for those in head office.
#3: Be m-commerce ready
Get ready to receive a lot more m-commerce orders, especially in high-growth markets. M-commerce is growing rapidly in developed countries. In developing countries, it’s growing even faster, so make sure your mobile website (or have an app created) is fast, user-friendly and able to handle payments in these new markets. Don’t lose out to competitors who have optimised their online stores for m-commerce.
Expanding abroad can prove very profitable for UK retailers and e-commerce brands, as well as retailers in other EU countries. It is a low risk, high-reward strategy, if you start with web traffic data, customer feedback and build on initial success with websites configured for local audiences and new markets.
To get started with cross-border trade, or for any other advice about taking payments, please get in touch with our team. Call +44 (0)808 159 7217 or email [email protected]